Red tape burden: charity regulator hits back at critics

Commissioner Susan Pascoe is hopeful that a workable result can be achieved in the next six months.
AFR

by
Sally Rose

The federal government’s new regulator for the $43 billion not for profit sector has defended claims that it will increase costs and add to the bureaucracy already burdening the more than 56,000 charities.

The Australian Charities and Not-for-profits Commission, headed by commissioner Susan Pascoe, started on December 3.

A key policy aim of creating an independent regulator for the sector was to reduce red tape by creating a “one-stop shop".

But the federal opposition and other critics said that because it was established without an agreement from the states and territories to harmonise their laws governing charities and non-profits, the move would have the opposite effect, creating an extra layer of reporting.

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If the states could reach agreements on financial reporting, fundraising and governance, that would mean for all practical purposes the goal of a one-stop shop was achieved, he said.

Treasury is chairing a COAG working group on not for profit tax reform with a view to harmonisation.

Ms Pascoe hopes a workable result can be achieved in the next six months.

Transitional reporting arrangements will be in place until June 30, 2014. Until then, charities will only need to provide an annual statement of activities. The sector wants certainty on the new financial reporting obligations and accounting standards which will apply.

The most contentious issue being debated is the make-up of a test that is expected to be introduced requiring religious and educational organisations to demonstrate the public benefit they provide. “There has long been a tension between regarding all religions as charitable and then groups some people consider cults getting charitable status," the chief executive of the Community Council for Australia, David Crosbie, said.

Consistent national fundraising rules would ease the compliance burden on charities. “The RSPCA in Australia raises around 97 per cent of its income directly from the community and like other charities working nationally, it must hold and maintain eight licences," says the animal welfare organisation’s national president Lynne Bradshaw, who is also managing director of medical devices company Medevco.

A sticking point is whether there should be any concession in the directors’ liabilities of volunteers. The Australian Institute of Company Directors is still developing its position. “It’s a matter of balancing governance standards with ability of non-profits to attract good volunteers," the peak body’s non-profits manager, Phil Butler, said.

The managing director of animal protection institute Voiceless, Brian Sherman, argues there should be no difference. “Why should charities and their supporters be any less protected by the actions of their directors than any other type of business?" said Mr Sherman, who is chairman of Aberdeen Leaders and a former director of Network Ten.